Out with the Old, In with the New: NYSE Group, Starting a New Tradition

March 7, 2006 will mark the end of a 213 year old tradition, but it will also be the start of new era.  If
all goes according to schedule, tomorrow the New York Stock Exchange
(NYSE) will complete a merger with Archipelago Holdings Inc. (Arca). [1]  The
merger will create a new publicly held corporation, NYSE Group Inc.
(stock symbol: NYX) making the NYSE a for-profit public company. [2]  The
merger has been a long time in the making and is not only significant
for the Big Board, but is also a major milestone in the corporate world
as once again new standards have been set. [3]  The
transaction will give the NYSE, already the world’s biggest exchange,
high tech trading capabilities and 49% of the stock trading market. [4]


The Old NYSE


It was less than three years ago that the future of Read the rest

Executives are Getting the Green and Shareholders are Seeing Red

The beginning of 2006 usually gives pause to look back on the past year and reflect.  When CEOs look back on the past year their vision may be obscured by the stacks of cash that were bestowed upon them.  It was reported last week that despite small stock gains and slowing growth executive pay continued to swell in 2005. [1]  Always
a hot topic, and often over 400 time the amount earned by rank-and-file
employees at large companies, executive pay is on the top of many
people’s watch lists for 2006.[2]  This article
will take a look at how some justify executive pay, what recourse
shareholders have to stop executives being paid too much and the
proposal the SEC has made regarding disclosure of executive

Compensation On the Rise


much of the data of 2005 executive pay will not become available until
Read the rest

Where Have All the CEOs Gone?

As the year comes to a close, 2005 will be marked as a leading year of Chief Executive Officer (CEO) turnover.[1]  With
1,100 CEOs having already left this year, departures have already
exceeded the previous high set in 2000 when the dot-com bubble burst.[2]  The
trend is a bit surprising as the economy and corporate profits have
both been on an up swing this year. While it might be easy to attribute
the exodus rate to the impact to the pressures of compliance with
Sarbanes-Oxley, there are other factors that seem to provide a better
rationale for this year’s trend.

It should be noted that the majority of CEO departures this year have been voluntarily.  In October, one of the highest departure months with 96 exits, only 5 CEOs left as a result of corporate scandals.[3]  Hence, the majority of this year’s increased rate is not Read the rest

D&O Insurance Coverage: What is it good for?

Corporate scandals over the past few years have been numerous and high-profile.  As a result, the conduct of directors and officers of corporations have become subject to a high level of scrutiny.  In
addition to the public keeping a keener eye on the activities of
corporations, the Sarbanes-Oxley Act of 2002 has increased the
potential liability of directors and officers. [1] The Act, having
established new fines and penalties for the corporate board, has had
the incidental effects of causing the price of director and officers
(D&O) liability insurance to rise dramatically and of creating a
need for more sophisticated D&O insurance.  While
D&O coverage does exist, albeit it with higher deductible and
limited coverage, a recent case demonstrates how directors may still
bear the costs of litigation even with a policy. [2]

a recent case from the U.S. district of Arizona dismissed the bad faith
Read the rest

Will Time Help?: SOX 404 Compliance

September 21, 2005 marked the first open meeting of the Securities & Exchange Commission (SEC) under its new Chairman Christopher Cox.
More importantly, at that meeting the SEC approved a one year extension
for compliance with Sarbanes Oxley (SOX) section 404 for
non-accelerated filers.  [1]  The
Commission also proposed creating new categories for large accelerated
filers, who would be the only category subject to the initial phase-in
period and would make it easier for some companies to move from
accelerated to non-accelerated filer status. [2]

Section 404 of SOX requires companies to perform an audit of internal controls.  One
of the most controversial sections of the act, under the current rules
accelerated filers must include in its annual report an audit by
independent auditors and a report by management that cover the
company’s internal controls over financial reporting. [3]  For
accelerated filers the
Read the rest

Regulation FD: Siebel Fought the Law and Siebel Won

Five years after the Securities & Exchange Commission (SEC) passed Regulation FD (“Fair Disclosure”) a court finally had a chance to interpret its application.  On September 1, 2005 the United Stated District Court for the Southern District of New York dismissed the SEC’s claims against Siebel Systems, Inc. [1]  Regulation FD prohibits a company from disclosing information to analysts and investors that is non-public. [2]   Adopted
in 2000, the regulation has often been criticized for being overly
broad. However until Siebel no company challenged the regulation in


FD is based on the idea that no group should have advance access to
information about a public company that may impact stock prices or that
may influence trading.  Unsurprisingly, one of the regulation’s main purposes is to prevent insider trading.  In
an effort to help companies comply Regulation FD considers information
to become
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